The latest upgrade to restaurant dining: no more waiting for the check

In the last few years, we’ve heard the predictions: that we’ll soon pay everything with the swipe of a phone; that cash and cards and coins are going the way of the dodo; that PayPal, Google Wallet, Square and other mobile payment options will revolutionize commerce. And instead, a Berg Insight report in June declared that, in 2012, the vast majority of North America’s mobile payments were handled by Starbucks -- whose specialty, when we last checked, was coffee.

Clearly, the door is still wide open for a company to take the lead in the digital payments space.

Cue the latest entrant: Cover, which, surprisingly, helps people pay for just one thing: restaurant meals.

“Right now, most Americans have a mobile payment device that travels with them called their credit card, which works reasonably well. You can swipe it and leave just about all the time, but the one place it doesn’t work really well is in restaurants,” says cofounder Mark Egerman. “Restaurants have one of the worst payment experiences most Americans go through. You have to wait for the check, put down your cards, they take them away, they take them back, and you have to figure out the tip.”

Instead of going through that hassle, Cover diners just tell the server at the beginning of the meal that they’ll be paying with the app. When they’re done eating, they get up and walk out. Cover takes care of the bill and -- with a percentage you’ve preset -- the tip. It even automatically splits the bill amongst all the diners. And luckily for Cover, the dine-and-dash routine often catches the attention of nearby diners, who want to know how they, too, can avoid the hassle with the check.

Restaurants also might prefer Cover, because the service levies them lower and more transparent fees than plastic (which charges different amounts depending on, say, whether you’re using a cobranded airline card or a Visa Signature), and even does next-day deposits compared to three to five business days for the average credit card. Plus eliminating the check dance at the end of each meal will probably speed up table turnover.

One month after its Oct. 1 launch, Cover already had a couple dozen New York City restaurants on board, including popular spots such as Carbone, Empellon Cocina and Yunnan Kitchen. But no matter how neat the concept is, or how good a deal it is for restaurants, how will Cover actually get people to sign on when they’re so used to using their credit cards?

“What Cover is focused on -- removing payments from the table altogether -- I really do think that is fundamentally transformational,” says Denee Carrington, a mobile commerce senior analyst at Forrester Research. “The part of your dining experience that you want to care about or want to remember is not how you paid. The more that can disappear, the better.”

She could see it catching on with 20- and 30-somethings who dine out with friends frequently, especially in places like New York or big cities in California with an active nightlife, though maybe not with 40-something parents who don’t dine out with friends as often.

However, Carrington cautions, digital payments is a competitive space. Some bigger players could easily mimic the app and would have the resources to crush Cover at its own game. For instance, in July, PayPal launched Pay at Table; its relationships with many commonly used hospitality point-of-sale systems, such as NCR, could help its system dominate. Another mobile payments company, Paydiant, is already powering mobile payment apps for companies like Subway.

Both of these payment experiences are not as seamless as what’s promised by Cover -- with Pay at Table, you don’t need to wait for the check, but you do need to pull out your phone and settle up at meal’s end; and with Paydiant, you need to wait for the bill and then scan the bar code on it. Still, “what I’d expect to see is that some of the players that have been around longer and have more scale and frankly more resources will agree [Cover] is a good idea and try to mimic it,” Carrington says.

So unless Cover partners with a company like OpenTable that already has existing restaurant relationships, she suggests, it could also soon go the way of the dodo.